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Nevada’s public employee pension fund invests passively and beats peers (2016)

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Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#131

Post by tossandthrow »

Beijinger wrote: post #130

All this is true, and there are many good comments in the thread here. But this "hey dude, stock picking is for idiots and all non idiots but index funds" should be treated with caution. Index funds are an extremely clever idea but were never meant to be used on such a scale. To give you some ideas: https://www.forbes.com/sites/chriscarosa/2024/04/02/index-fu...

There are a lot of unknown for the markets in the future. Also the 0 or negative interest rate environments we will probably enter (again).

IMHO we need to rethink or tweak the financial system sooner rather than later.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#132

Post by Findeton »

cjblomqvist wrote: post #124
Findeton wrote: post #110

Earlier quoted context omitted.

Fundsmith for example has beaten the market for a long time (not this year though). I can also mention another Spanish fund that I know: Tercio Capital. https://markets.ft.com/data/funds/tearsheet/charts?s=GB00B4Q... https://www.finect.com/fondos-inversion/ES0174115057-Cinvest...

There are some research (instead of cherry picking/anecdotes). I don't have any links right now but basically half of the funds lose compared to the index (by law of nature - averages and all that). Furthermore, taking fees into account, just a few percentages make anything more (over time) - which is probably within scope of randomness.

In general hard working prudent value investors are able to beat the index. It's just that those are very few. I mean Buffet has done it for half a century, that's not a coincidence.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#133

Post by ChrisMarshallNY »

benrapscallion wrote: post #91
ChrisMarshallNY wrote: post #87

Earlier quoted context omitted.

I haven't touched my 401(K) in over 30 years. It's done 9-20% per year. It's not super aggressive, but will take a hit, on really bad markets (the only year it actually lost money, was 2020 -and it has completely made up for that. It even made some money in 2008). I ignore the Fidelity calls. Every time a new broker rotates in, they try to get me to move my money around.

Is it invested in an index fund?

Yes.

I contributed 50% to a bond fund, as well, but that is like, 10% of the total, nowadays.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#134

Post by otoburb »

emacdona wrote: post #104

To any fund manager out there that truly believes you can beat the market, here is how you can sell me your fund: We agree on an index and a time frame. You guarantee me the same return as the index within that time frame. If you beat the index, you keep 90% of returns ABOVE the index (and I get 10%). We both win, and you win big. If you don't beat the index (within the time frame), you make up the difference (so I g…

Sounds similar to recently launched buffer ETF products, specifically BlackRock and Innovator that hedge 100% of downside while capping your upside across different time horizons indexed to the S&P500.[1]

[1] https://www.bloomberg.com/news/articles/2024-07-01/blackrock...

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#135

Post by nerdponx »

Beijinger wrote: post #130

All this is true, and there are many good comments in the thread here. But this "hey dude, stock picking is for idiots and all non idiots but index funds" should be treated with caution. Index funds are an extremely clever idea but were never meant to be used on such a scale. To give you some ideas: https://www.forbes.com/sites/chriscarosa/2024/04/02/index-fu...

On the contrary, that article makes it seem perfectly fine to invest in index funds.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#136

Post by Galanwe »

bumby wrote: post #116
Galanwe wrote: post #58

Earlier quoted context omitted.

> Sharpe ratios and all those “risk” adjusted calculations all involve assumptions that may or may not be true. On the contrary, these risk adjusted measures assume nothing more than a normally distributed random variable. If you just look at annualized returns, then go ahead and invest in CDOs ETFs. More seriously, the S&P for instance has around 20% annualized vol, which IMHO is way above what you would want for a…

> assume nothing more than a normally distributed random variable But look at something like systemic risk: it’s not necessarily normally distributed. The S&P returns skew left. I’m sure there are other risk metrics that break this assumption as well.

Right, risk is often fat tailed, but unless we enter an expert discussion, for which HN is hardly a good medium, it is safe to assume 99% of strategies out there yield normally distributed returns. Non normally returned strategies are rarer and sophisticated.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#138

Post by p_j_w »

Findeton wrote: post #132
cjblomqvist wrote: post #124

Earlier quoted context omitted.

There are some research (instead of cherry picking/anecdotes). I don't have any links right now but basically half of the funds lose compared to the index (by law of nature - averages and all that). Furthermore, taking fees into account, just a few percentages make anything more (over time) - which is probably within scope of randomness.

In general hard working prudent value investors are able to beat the index. It's just that those are very few. I mean Buffet has done it for half a century, that's not a coincidence.

Given the statistics and number of investors involved, it seems like an absolute certainty that a few people would beat the index for the entirety of their lives simply by chance.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#139

Post by zeroonetwothree »

dralley wrote: post #109
thevillagechief wrote: post #79

It was Richard Thaler's Misbehaving: The Making of Behavioral Economics book that finally broke through my thick, anxiety ridden skull and convinced me to stop reading economic news everyday and just forget the the retirement accounts existed. If I'd read that book earlier, I'd be up 3X on my positions.

I've done well (39% annual returns) investing in 2-3 individual stocks in addition to index funds for the rest of my investments. More than that would be IMO too much to pay attention to. Admittedly my choices for stocks are a bit on the high-risk side, but it's worked out well so far. Picking up lots of AMD in 2017, and Rivian 6 weeks ago, seems to have been decent calls.

Sorry but I never believe these online claims given with no evidence about ridiculously high returns. It’s not to say you are lying but it’s easy to miscalculate these things.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#140

Post by stavros »

hhmc wrote: post #117
emacdona wrote: post #104

To any fund manager out there that truly believes you can beat the market, here is how you can sell me your fund: We agree on an index and a time frame. You guarantee me the same return as the index within that time frame. If you beat the index, you keep 90% of returns ABOVE the index (and I get 10%). We both win, and you win big. If you don't beat the index (within the time frame), you make up the difference (so I g…

Why would anyone take the other side of this bet? It's an incredible financial instrument, that anyone on the buyside would buy in an instant (as formulated -- ignored fees/tcosts etc).

If I can consistently make more than 10% on your money, I'll take the other side.
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